Several Canberrans have complained to the Australian Competition and Consumer Commission that ActewAGL is charging the carbon tax on its Greenchoice scheme, an economist says.
Economist at the left-leaning Canberra based think tank the Australia Institute Matt Grudnoff said quite a few people had been in touch with him concerned about the Greenchoice scheme since he had an opinion piece published in The Canberra Times.
He said several had also complained to the ACCC, which is monitoring whether companies use the tax to price gouge.
A commission spokeswoman said she could not confirm whether the company was being investigated.
ActewAGL retail general manager Ayesha Razzaq said the utility was aware the ACCC was watching companies and “we are certain that we are not misrepresenting the impact of the carbon pricing to our customers”.
“ActewAGL understands that this is confusing for many customers and paying the carbon price for a green energy product goes against the grain of common sense. But this isn’t a straight forward matter, and ActewAGL certainly does not benefit from this scheme,” she said.
“In a nutshell, green power is a voluntary government-accredited program that enables customers to purchase renewable energy for their homes, when they actually make that voluntary purchase of green power, they are supporting the product of electricity from renewable sources over and above mandatory government targets that are set by the government. So you cannot separate the electrons; the energy doesn’t directly feed into your home, it is added into the electricity grid … on the customer’s behalf.”
Mr Grudnoff said ActewAGL was either misleading its Greenchoice customers over the emissions they produced, or wrongly charging them the carbon tax.
The carbon tax is currently set at $23 for each tonne of carbon emitted and is charged to polluters, but is generally passed on to customers.
Mr Grudnoff said ActewAGL's Greenchoice scheme – which he takes part in and broadly supports – was too complex and convoluted.
He said that people on a Greenchoice 100 plan – whereby all the electricity they used was "displaced by green sources", according to the ActewAGL website – should not have to pay the carbon tax.
"On the bill is a graph ... that shows my energy usage on the left hand side and on the right hand side is average daily emissions in tonnes. If you are 100 per cent renewable, basically your average emissions is zero for each day," he said.
The scheme he took part in, which effectively allows the utility to buy 10kw a day of renewable energy regardless of how much he used, meant he had negative emissions in some quarters.
"The graph is entitled 'Your electricity uses and green house gas emissions'. If that is correct, then surely I shouldn't be paying the carbon price on my bill. The bill is saying I am not producing carbon emissions, and yet ActewAGL is admitting I am paying the carbon price," he said.
"Either they are charging the carbon price when they shouldn't or this graph is misleading. I don't know which one it is, but there are inconsistencies between the two. They both can't be correct as far as I can tell."
Ms Razzaq said that ActewAGL bought energy from the national grid, or pool, and paid a carbon price on this. Greenchoice was a separate scheme.
“When a customer purchases Greenchoice, they pay for the retail rate of electricity that comes from the grid. Then they pay for what we call a large generation certificate, which is a certificate that comes from Greenpower accredited renewable energy generators, such as wind and solar farms,” she said.
“They are two different schemes, so the price of that certificate that we purchase, hasn’t been impacted by the carbon price. So that Greenchoice premium, as we call it, has not been affected by the [carbon price], that is a separate transaction, and the customers still have to pay for that component.”
The utility’s website says Greenchoice customers are not exempt from the carbon tax "because customer's standard electricity rates are impacted by the carbon price".
Mr Grudnoff said this method raised some interesting questions.
"ActewAGL are not going to face the carbon price on the green energy they buy. There is a benefit if you like, [but] who is actually collecting that benefit?" he said.
Greenchoice customers were not getting that benefit, and it must either be going to the utility's profits or to all of its customers through lower overall prices.
Mr Grudnoff said he was still taking part in the Greenchoice scheme because it was one of the few ways that people could help reduce Australia's emissions by more than the 5 per cent locked in by the emissions trading scheme.
"I actually think that green power as an idea and a concept is an incredibly good idea, what I am bitterly disappointed at is that ActewAGL is treating green power in this way," he said.
He said the gap between what people paid for green power and normal, more emissive power, should narrow because of the carbon tax. This would require the utility to change the way it runs the scheme.
"I wouldn't have thought it would be too difficult. If you use 200kw/h in a quarter, ActewAGL will buy 200kw/h and plug it into their network. So while the actual electrons that are produced from say a windfarm aren't actually going into your house, that is not the important part. The important part is that ActewAGL has to buy a certain percentage of its electricity from green sources and the size of that percentage is based on how many customers of green power they have," he said.
While narrowing the price gap could reduce the overall size of the pool of money that ActewAGL would have to buy green power under the current scheme, Mr Grudnoff said lower prices could encourage more people to take up Greenchoice, thereby increasing the total pool instead.
According to ActewAGL's latest annual report, 533.4GWh of energy came from renewable sources in 2010-11, and there was a system throughput of 3062GWh.
It had 168,937 customers and connections, and the company increased the number of Greenchoice customers by 10.45 per cent in 2010-11 to 19,896.
"When customers opt for Greenchoice, the extra amount they pay is invested in renewable energy generation from sources like mini-hydro, wind power and biomass. Depending on the plan a customer chooses, ActewAGL purchases a certain amount of renewable energy on the customer's behalf. This can be a percentage of the electricity they use, or a fixed amount each day. In either case, that amount of renewable energy is added to the electricity grid on the customer's behalf. This helps to reduce greenhouse gas emissions associated with the generation of electricity from fossil fuels," the report said.